Megaupload founder denies internet piracy charges

The founder of file-sharing website Megaupload was ordered to be held in
custody by a New Zealand court on Monday, as he denied charges of internet
piracy and money laundering and said authorities were trying to portray the
blackest picture of him.

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Founder of Megaupload.com, Kim Schmitz, also known as Kim Dotcom, is escorted by a policeman as he appears in court in New Zealand for an earlier hearingPhoto: AFP/Getty Images

Kim Dotcom, AKA Kim Schmitz, who faces up to 20 years imprisonment for running Megaupload.com

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The homepage of the website Megaupload.comPhoto: AP

8:15AM GMT 23 Jan 2012

Kim Dotcom, a German national, also known as Kim Schmitz, argued for bail saying through his lawyer that he posed no threat of absconding or restarting his businesses.

"Mr Dotcom emphatically denies any criminal misconduct or wrongdoing, and denies the existence of a Mega Conspiracy," defence lawyer Paul Davison told the court on Monday.

But prosecutor Anne Toohey said Dotcom posed a flight risk "at the extreme end of the scale" because it was believed he had access to funds, could easily arrange transport, and had multiple identities.

Dotcom, 38, and three others, were arrested on Friday after police raided his country estate at the request of the US Federal Bureau of Investigation. Police cut Dotcom out of a safe room he had barricaded himself in.

The court adjourned the hearing until later in the day as it considered certain legal issues in closed court.

The judge treated Dotcom's bail application separately from that of the other three accused. Dotcom, dressed in black pants and a tracksuit top, sat quietly in the dock with hands clasped looking at the judge as his lawyer argued for bail.

The indictment and arrests of four company executives last week came as debate in Washington reaches a fever pitch over online piracy as lawyers try to craft legislation cracking down on it while trying to avoid censoring the internet.

The group, dubbed by prosecutors as "Mega Conspiracy," was accused of engaging in a scheme that took more than $500 million away from copyright holders and generated over $175 million in proceeds from subscriptions and advertising, according to the indictment unsealed on Thursday.